HF1234

This bill, introduced in the Minnesota House of Representatives, focuses on increasing payment transparency in public contracts. It amends the Minnesota Statutes to establish clearer rules regarding retainage, payment timing, and notification requirements for contractors and subcontractors involved in public improvement projects.

Key provisions include:

1. Retainage Limits and Release Timelines:

   • Public contracting agencies can withhold up to 5% of progress payments as retainage.
   • Retainage must be released no later than 60 days after substantial completion of the project.
   • Contractors must pay subcontractors their share of retainage within 10 days after receiving payment unless there is a dispute.
   • Retainage for warranty work is prohibited.

2. Payment Notification Requirements:

   • Public contracting agencies must notify contractors and subcontractors at all tiers of payments made, including progress, final, and retainage payments.
   • Notification must include payment amount, date, recipient's details, scope of work, and any retainage or withholdings.
   • This notice must be provided within three business days of making the payment and at no cost to the contractors or subcontractors.

3. Retainage in Building & Construction Contracts:

   • Similar retainage rules apply to private owners who make construction payments.
   • Retainage cannot exceed 5%, and must be released within 60 days of substantial completion.
   • Owners must provide written notice if any amounts are withheld.

4. Restrictions Against Payment Delays:

   • Delays or restrictions on invoice submission are deemed contrary to public policy and are void and unenforceable.

The bill ensures prompt payment and transparency in public construction projects, benefiting contractors and subcontractors by providing clear deadlines, mandatory notifications, and restrictions on unjustified payment delays.